China’s chicken supply chain in danger

By Oscar Rousseau

- Last updated on GMT

China's chicken supply could be at risk
China's chicken supply could be at risk

Related tags: Supply chain, Influenza, Livestock, Poultry

China’s supply chain faces a challenge with historically low breeding stock supplies compounded by outbreaks of bird flu in markets China depends on for a regular flow of grandparent birds. 

China imports all of its breeding stock for the white-feathered broiler chickens used in fast food. Imports of its grandparent stock are down 70% since 2014, and the dwindling supply is leading to a decline in the availability of white broiler meat, according to a report from Rabobank.

Although the Netherlands has reopened supplies of breeding stock to China this year, the avian influenza (AI) epidemic ripping through Asia, Europe and Africa, has put the brakes on the opportunity for the short-term future.

Rabobank claimed the onslaught of avian influenza in the Netherlands and Germany – key breeding stock markets – would put pressure on China’s breeding stock supply chain.

“China has especially been affected by the new reality which looks like the AI virus strains have become endemic in big parts of the world,”​ Nan-Dirk Mulder, associate director commodities, feed and animal protein at Rabobank, told this site.

“This has made their supply chain more sensitive to volatility driven by the waves of outbreaks of AI in breeding stock-supplying countries. With their current very tight supply – which was caused by last year’s restrictions on trade – together with the new outbreaks, it will be expected that the market will remain tight for at least another year.”

Because import levels of breeding stock are low, Rabobank expects China to import high levels of poultry meat and products popular in the country, such as feet, wings and legs.

The long-term outlook is that China may be forced to move to a more strategic supply chain of breeding stock if the AI outbreaks continue to further hit supplies. Mulder believes the headwind is already “pushing the industry to change its supply chain model”​.

Mulder pointed to a deal signed by Shandong Yisheng Livestock & Poultry Breeding Co and French genetics firm Hubbard, which will supply rare great-grandparent stock to the Chinese broiler breeder.

Related topics: Markets, East Asia, Supply chain, Meat, China

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